Damelin takes a backseat as Wonga faces heavy criticism

Founder and chief executive of the embattled payday lender Errol Damelin has announced he will become chairman.

A change of guard at a time when a company is facing intense scrutiny is an interesting move and one Errol Damelin, founder and chief executive of Wonga, has gone for wholeheartedly - as he steps down from the helm, taking up the position of chairman.

Damelin has said he will hand the day-to-day running of Wonga to chief operating officer Niall Wass – who joined in January 2012 from Betfair, where he had been chief commercial officer. He hopes the shift will allow him to ‘focus on where Wonga should be heading in the next decade’.

The announcement comes just over a week after Wonga and other payday lenders faced MPs at a special select committee to defend their practices – it’s also been (somewhat tellingly) a week since Jonty Hurwitz – co-founder of Wonga – stepped down from the board of the company to ‘pursue other opportunities.’

What does this mean for Wonga? It could be a signal that in times of strife, Wonga needs to shuffle its skills base around a bit. Niall Wass’ experience at Betfair is clearly going to come in handy when leading Wonga. It could also be a sign Damelin is getting serious about giving Wonga another direction.

Wonga has already expanded its business outside its pay day lending operations. It launched Wonga for Business last year, to cash in on the current dearth of business lending. It also launched a product for the retail payments market. We could see further branching out as Damelin maps out where he sees the company going.

The move might also give Damelin a minor break from the wrath of the Archbishop of Canterbury, Justin Welby – who threatened to put payday lenders like Wonga out of business earlier this year.

The step back will allow Damelin to see the woods for the trees (and hide from Welby) but it also means he’ll be working part time – giving him a chance to focus on his other entrepreneurial interests. Given that he is presumably sick to the back teeth of criticism from consumer groups and MPs, he’ll almost certainly be giving energy a wide berth…